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Expensive, privatized, rushed computerized system in disarray

Monday, Jun 19, 2017

* AP

A $94 million online health insurance system has some Illinois state employees and agencies flummoxed and Gov. Bruce Rauner’s administration scampering to rid the system of bugs, according to interviews and documents reviewed by The Associated Press.

State workers have complained of a gummed-up system that has rejected coverage without notice and inexplicably stopped payroll deductions. The head of the Teachers Retirement System, where 106,000 retirees count on the program for insurance, points out that neither the specifications nor the system accounted for Medicare coverage.

Georgia-based Morneau Shepell was the only company to respond to a quickly executed November 2015 request from the Department of Central Management Services to design a web-based portal for managing health insurance options. The request was posted for only 26 days. Documents show CMS staff members were told to proceed without following guidelines for ensuring minority-owned business participation.

The state has paid the company $375,000 but owes $9.4 million for more than a year’s work. CMS hasn’t submitted a voucher for the entire fiscal year that ends June 30. Officials said that’s because of the two-year stalemate over a state budget that’s resulted in too little money to cover state bills. But from four accounts designated for covering Morneau Shepell costs, CMS has paid more than $29 million for other bills in fiscal 2017.

Click here and go read the whole thing.

…Adding… A little bit of background is here. Check out the comments.

- Posted by Rich Miller        

  1. - @MisterJayEm - Monday, Jun 19, 17 @ 10:20 am:

    “neither the specifications nor the system accounted for Medicare coverage.”

    Illinois has more than two million Medicare beneficiaries.


    – MrJM

  2. - wordslinger - Monday, Jun 19, 17 @ 10:20 am:

    The process seems designed to land one bidder.

    Whose Morneau Shepell’s clout?

    It’s just like old times. Hinky rushed bids and Cellinis landing outrageous lease deals. Shaking it up.

  3. - Nick Name - Monday, Jun 19, 17 @ 10:23 am:

    “Georgia-based Morneau Shepell”

    Morneau Shepell has a call center in Atlanta, but it’s a Canadian firm. Otherwise, good piece by John O’Connor.

  4. - wordslinger - Monday, Jun 19, 17 @ 10:25 am:

    Pardon, who is their clout?

  5. - Nick Name - Monday, Jun 19, 17 @ 10:26 am:

    “Ingram said when he asked where Medicare options were on the website, developers asked, ‘Why would you need that?’”

    Shakin’ up Springfield.

  6. - Nick Name - Monday, Jun 19, 17 @ 10:28 am:

    —Despite a requirement that vendors submit plans to ensure 20 percent participation in the contract by minority- or women-owned establishments under the state’s Business Enterprise Program, contract documents include a note that CMS “has been directed to move forward without the inclusion of a BEP goal.”

    CMS spokesman Richard Bossert would say only that “the decision was made by CMS at the time of procurement.”

    “Since Morneau Shepell was the only bidder, if BEP goals were not waived, the state would have received no bids at all,” he said. But the waiver note was dated Nov. 3, the day before the procurement request was even made public.—

    That’s gonna leave a mark.

  7. - Pyrman - Monday, Jun 19, 17 @ 10:33 am:

    Typical Rauner move, done in a hurry without following those darn pesky procurement rules. Picked an out of state company with questionable experience. Rauner cannot govern!!

  8. - 47th Ward - Monday, Jun 19, 17 @ 10:38 am:

    Rauner’s experience led us to believe he’d be running Illinois like a business.

    Turns out, the business was Enron.


  9. - Union thug - Monday, Jun 19, 17 @ 10:42 am:

    Enron at least looked like it was running till it colapsed. He’s doing worse.

  10. - Joe M - Monday, Jun 19, 17 @ 10:46 am:

    Morneau Shepell is a human resources services and technology company headquartered in Toronto, Ontario, Canada - Wikipedia

    The Company is the leading provider of employee and family assistance programs, the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions IN CANADA. - from company’s web page.

    No wonder they didn’t know much about Medicare.

  11. - Free Set of Steak Knives - Monday, Jun 19, 17 @ 10:47 am:

    I can think of atleast one Rauner Superstar from Georgia.

  12. - Me Again - Monday, Jun 19, 17 @ 10:51 am:

    Why not turn this over to DoIT? They are doing such a great job? /s

  13. - @MisterJayEm - Monday, Jun 19, 17 @ 10:57 am:

    “Whose Morneau Shepell’s clout?”

    This is the thread I’d start tugging on: “Prior to joining Morneau Shepell, [US Public Sector Partner, Jim Kelly] was the State and Local Government Market Leader for [Lincolnshire-based] Aon Hewitt.”

    – MrJM

  14. - A Jack - Monday, Jun 19, 17 @ 10:57 am:

    Seems rather irresponsible anyway to be bidding out a new system when there wasn’t even a budget. The system that was in place before had lasted many years. Yet, even without a budget they needed a new system? Talk about fraud, waste, and abuse.

  15. - Flynn's Mom - Monday, Jun 19, 17 @ 11:09 am:

    I think I prefer Illinois stirred not shaken/s

  16. - Retired SURS Employee - Monday, Jun 19, 17 @ 11:10 am:

    My Medicare Advantage plan (thru Humana) was mysteriously cancelled, effective at the end of February, on less than 10 days notice. Luckily, the cancellation notice arrived just before the end of the month. I immediately contacted Humana who pointed the finger at the State of Illinois. Anyways, to make a long story short it took about two months to clear up all the errors that subsequently occurred. At one point, someone from CMS acknowledged their culpability without going into any detail. So much for running the state like a business!

  17. - Name Withheld - Monday, Jun 19, 17 @ 11:19 am:

    Here’s the next part of MrJM’s thread:

    Governor Rauner hired Joe Beyer from Aon Hewitt as part of his policy team back in Jan 2015.

  18. - Anonymous - Monday, Jun 19, 17 @ 11:22 am:

    Governor’s own

  19. - P. - Monday, Jun 19, 17 @ 11:31 am:

    The questions coming out of this is like unpacking a clown car. My understanding is Deloitte is now running interference with the points of contact at the agencies after Morneau Shepell botched the rollout. How much more is that costing?

    Nice no comment from the people we are paying a $100 million for a garbage product. Must be a class outfit.

  20. - Moe Berg - Monday, Jun 19, 17 @ 11:34 am:

    Between this and the furniture store lease, it seems like there could be some real opportunity for the legislature to exercise its oversight function and hold hearings delving into exactly who is getting sole-source contracts and examine Rauner administration contracting in general. Seems there could be quite a lot of rocks to kick over.

  21. - Union Man - Monday, Jun 19, 17 @ 11:45 am:

    Morneau Shepell is based in Canada! Exporting IL jobs to another country is not consistent with Bruce’s words. Georgia? Someone’s not truthing….

  22. - Annonin' - Monday, Jun 19, 17 @ 11:48 am:

    Hmmmm wonder who wanted us to think this outfit was from ‘Georgia” Every time we hear Rauner and Georgia we think of Nick who was busy passin’ the hat on Friday form Pence’s criminal lawyer. Nick is reportedly plannin’ to bundle all his genius and run for Governor there.
    Doubtin’ any connection. $uper$tars don’t know anything; about insider stuff

  23. - JS Mill - Monday, Jun 19, 17 @ 11:49 am:

    =This is the thread I’d start tugging on: “Prior to joining Morneau Shepell, [US Public Sector Partner, Jim Kelly] was the State and Local Government Market Leader for [Lincolnshire-based] Aon Hewitt.”

    Is anyone on the Rauner team from Lincolnshire? Seems like someone really close might be from there?

    Hmmm….who could it be?

  24. - northsider (the original) - Monday, Jun 19, 17 @ 11:52 am:

    I’d check GTCR alum connections in the second degree if I had the time, but I don’t.

  25. - Name Withheld - Monday, Jun 19, 17 @ 11:54 am:

    Joe Beyer, one of Rauner’s policy people (at least, back in Jan 2015) and is from Aon Hewitt.

    Jim Kelly, US Public Sector partner at Morneau Shepell is also from Aon Hewitt.

  26. - Nick Name - Monday, Jun 19, 17 @ 11:58 am:

    “Is anyone on the Rauner team from Lincolnshire?”

    L, as they say, OL.

    Also, Aon Hewitt is headquartered in Lincolnshire.

  27. - Say no to big government - Monday, Jun 19, 17 @ 12:01 pm:

    “Illinois has more than two million Medicare beneficiaries. ”

    This is a system for the State and serves employees and retirees. Not every Medicare beneficiary living in Illinois is a State employee or retiree. The number of those with Medicare is over 100,000.

  28. - RNUG - Monday, Jun 19, 17 @ 12:07 pm:

    Typical computer software contractor who tries to shoehorn their existing application into the State’s needs.

    It usually ends up as a custom modified solution costing more than rewriting the application from scratch using State employees. And when they do get it working right,it will be such a kludge nobody will know how to maintain or upgrade it

  29. - Anonime - Monday, Jun 19, 17 @ 12:12 pm:

    The old system worked well without all the problems this one has. All DOIT needed to do was put a GUI front end on the existing system and things would have been fine. Apparently they weren’t even capable of doing that. makes you wonder about the superstars there.
    It’s fine to create new systems when there is the money to DO IT, but we as a state don’t have that right now. Why replace things that are working with expensive systems that don’t when there are social service agencies going under every day.
    They should scrap the new system, pay a small fraction of the bill and be done. Of course, that would mean that all of the people who were experienced with the current system who saw the handwriting on the wall and got out would need to be hired back. Keeping jobs in Illinois instead of giving them to another country.

  30. - PublicServant - Monday, Jun 19, 17 @ 12:17 pm:

    ===Typical computer software contractor who tries to shoehorn their existing application into the State’s needs.===

    And with the exodus of institutional knowledge in the state workforce over the last 7 or so years, who are they getting the specs from anyway? No wonder the showhorn doesn’t work.

  31. - Union Dues - Monday, Jun 19, 17 @ 12:43 pm:

    There has been a decline in the quality of state management since the Blago days. The more technical areas have been hardest hit. IT management is particularly lacking.

  32. - Honesty is best - Monday, Jun 19, 17 @ 12:54 pm:

    ===Flesch maintains “the state will save $500 million annually when the website is fully functional…”===

    $500 million in annual savings would be the result of shifting more of the healthcare premium costs to employees. The Morneau contract will not save $500 million annually.

    ==”Due to years of underfunding of the Group Health Insurance Program, there was an urgency to achieve cost savings, so we could pay our bills.”==

    As of Feb. 2015, the backlog was 7 months at $1.5 billion. Timely and prompt pay interest was just over $100 million. This was a culmination of 10 + years of underfunding.

    As of May 2017, that backlog was up to 2 YEARS at $4.65 billion. Interest is almost $500 million. Source: COGFA

    Thus: there has been zero savings, more admin costs and over 200% growth in debt and interest owed by the program after two years of the current administration’s management and one year of Morneau’s contract.

  33. - Joe M - Monday, Jun 19, 17 @ 2:25 pm:

    In January 2016 Rauner signed an executive order creating the Illinois Department of Innovation and Technology that he said would lead the State in technology/records management and save the State money. Yet he outsources this to a Canadian company.

  34. - efudd - Monday, Jun 19, 17 @ 2:39 pm:

    I sure wish these business mavens who think they can just start at the top of government and do everything so much better than career politicians would quit being so good to us.

  35. - wordslinger - Monday, Jun 19, 17 @ 2:45 pm:

    Good thing Rauner is a new breed of governor, beyond reproach when it comes to honesty and integrity.

    Otherwise, given state history, these IT contracts and lease deals would stink to high heaven.

    Any reporter going to get to the bottom of how it came to be that Munger raided GRF for IT consultants on her way out the door, when there was a flush dedicated fund for their pinstripe patronage?

    And how did it happen that The Cellini Gang Rides Again with lease deals?

  36. - Our Princess is in Another Castle - Monday, Jun 19, 17 @ 3:16 pm:

    Gee, I just can’t wait for ERP.

  37. - Winnin' - Monday, Jun 19, 17 @ 3:44 pm:

    If this is how Bruce plans to reform the procurement process, we are in trouble.

  38. - sharkette - Monday, Jun 19, 17 @ 4:39 pm:

    The minimum posting rule is 10 days only
    4 weeks is pretty long.
    The rules do not require you are in Il. Though they should.
    They also do not require you be small, nor minority bus either.
    And if you bid and the requirement is that you sub with one,
    you also do not have to if you also submit the proper justification why you did not.
    Are the rules on public bidding in IPB.
    And Rauner has nothing ot do with an agencies posting. The agency CPO does

  39. - sharkette - Monday, Jun 19, 17 @ 4:42 pm:

    Procurement has been greatly improved. It’s easier , it’s less work, There are more and more BEP requirements on more bids than ever before. the dollar amount has been raised for small business set asides as well.
    No one gets paid but that is nothing new. Even before Rauner it was typical for horrific payment schedules

  40. - Ma'at's Feather - Monday, Jun 19, 17 @ 5:43 pm:

    Word in Spfld is that Morneau Shepell is one huge “cluster…” I agree. I retired January of this year, and so far, Morneau Shepell has cancelled my health, life, and dental insurance twice. I’ve had to call each time to get it reinstated. Given that my check from today did not include my insurance, I suspect they’ve done it a third time! And this is what we’ve paid for?!!

  41. - 47th Ward - Monday, Jun 19, 17 @ 6:47 pm:

    ===I retired January of this year, and so far, Morneau Shepell has cancelled my health, life, and dental insurance twice. I’ve had to call each time to get it reinstated. Given that my check from today did not include my insurance===

    Have you considered that this is not a bug, but a feature of the new system? It’s going to save the state millions on retiree healthcare by just canceling the policies. But don’t worry, President Trump’s plan will be the best health insurance plan you’ve ever seen.

  42. - P. - Monday, Jun 19, 17 @ 7:03 pm:

    So they sort of followed the procurement rules? CMS better get their Crain’s innovation awards nomination form filled out.

  43. - Tough Guy - Monday, Jun 19, 17 @ 9:09 pm:

    While the minimum legal posting period is only 10 days it is not uncommon for an RFP of this magnitude to be posted for several weeks and then opened months later in order to allow all interested parties adequate time to prepare proposals. A vendor’s conference is generally held to afford potential vendors the opportunity to understand and ask questions especially with the complexity of a procurement like this. It can also be a time consuming process when scoring an RFP to determine if the vendor is responsive. But when you shorten the procurement window which doesn’t allow sufficient time to produce a responsive RFP, a number of vendors will not bid on something they are not sure of. Plus with the state not paying its bills, more and more vendors are simply not bidding. Finally, it is the agency SPO (State Purchasing Officer) rather than the CPO (Chief Procurement Officer) who posts the bid. A new CPO for General Services was appointed by the Ethics Commission shortly after Rauner became Governor.

  44. - Rufus - Monday, Jun 19, 17 @ 10:12 pm:

    This “disarray” will pale in comparison to IES and ERP screwed up projects - Both lead by Deloitte, a company that yet has had a successful project at the State of Illinois, but they have received hundreds of millions dollars, with gigantic failures in every project they been involved . Bidbuy, an Offfice of Procurement computer program, is two years behind schedule and one big mess as well. It was purchased, as an “off the shelf” appplication, then heavily modified in order to meet State laws, policy, and procedures. The company that is installing it, keeps submitting “change orders”, a way to vastly inflates the original cost. It will another failure, cramed down the throats of state workers, adding more time and effort to easy procurement. The State exists to enrich these companies who make vast political contributions.
    “Illinois, the land of legalized corruption.”

  45. - Rufus - Monday, Jun 19, 17 @ 10:16 pm:

    Make that “every procurement” darn autofill :^)

  46. - A. Retiree - Tuesday, Jun 20, 17 @ 3:54 pm:

    Morneau Shapell…Reminiscent of MSI…. I hope investigations and prosecutions are forthcoming.

  47. - stat detox - Monday, Jun 26, 17 @ 9:46 am:

    Great entry. One of the best I’ve come upon.

Sorry, comments for this post are now closed.

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